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  • Writer's pictureBy The Financial District

German Investments In China Decline After Reaching Record High

German direct investment in China eased in the first half of the year, although it remained close to its record high in 2022 and increased as a share of the country's overall foreign investment, according to official data analyzed by the IW Institute, as reported by Swarah Marsh for Reuters.

German companies such as Volkswagen are heavily dependent on the China market. I Photo: Volkswagen Group China

Investment in China dropped to 10.31 billion euros ($11.02 billion) in the first half of 2023 from 12 billion euros in the first half of the previous year, the IW said in an analysis exclusively shared with Reuters.

However, this amount was still nearly twice as much as the 5.5 billion euros invested in 2019, before the coronavirus pandemic hit. It was also more than double the 4 billion euros invested on average in the first half of the year over the previous decade.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

The data highlights concerns that German firms continue to invest significantly in China despite the government's appeals for companies to reduce their exposure and its significant reduction in investment guarantees for the country.

German direct investment flows declined sharply to 63 billion euros from 104 billion euros the previous year as its economy grappled with a recession.

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